Carphone will sell its stake in US venture

Steve Dinneen
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CARPHONE Warehouse (CPW) is set to announce a major overhaul of its tie-up with Best Buy, including shuttering a string of UK stores and selling its stake in its US joint venture for almost $1bn (£620m).

The British firm will finally pull the plug on 11 super-sized “Big Box” electrical retailers when it posts its first half results. It is not yet known if any outlets will be bought by rivals.

The loss-making stores – once seen as the lynch-pin of Best Buy’s European expansion – have been under review since the summer, with consumer demand for expensive electricals at rock bottom. Best Buy had originally hoped to roll out up to 200 of the stores across Europe by 2013.

But the decision to sell its stake in the blisteringly successful US mobile phone business has come out of the blue. If the deal – which was first reported by Sky News’ Mark Kleinman – goes through, it could spell a bumper pay-day for CPW investors, with the funds likely to be returned as a special dividend.

Best Buy will maintain its stake in CPW’s UK high street business and it is understood the two may explore rolling out the successful mobile retailer formula into fast growing markets including China and India.

CPW may bring its results forward from tomorrow to this morning to coincide with the announcement. It is expected to post a further loss on the Big Box venture of around £35m.

May 2008
Best Buy and Carphone Warehouse announce a joint venture, Best Buy Europe, tasked with rolling out Best Buy stores throughout Europe.

November 2008
Amid the turmoil of the financial crisis after Lehman Brothers collapses, Best Buy issues a profits warning.

March 2009
The company says it will delay opening its first UK stores to early 2010, having originally planned to launch in the summer of 2009.

April 2010
The first Best Buy ‘Big Box’ store in the UK finally opens at the West Thurrock Retail Park in Essex.

February 2011
Best Buy chief executive Scott Wheway announces he is stepping down from his position.

June 2011
The company announces a freeze on the opening of new stores after reporting a loss of £62m for the year on the six stores so far opened.

November 2011
Carphone Warehouse is expected to announce the closure of the 11 Big Box stores as the economic turmoil continues to hit the consumer electronics market. It is also set to sell its stake in its US joint venture mobile retailer business, which has proved a blistering success since its launch. Cash from the deal is likely to be returned to investors.